The present value of $1 payable in the future decreases
a. the higher r is and the sooner it is to be paid.
b. the lower r is and the sooner it is to be paid.
c. the higher r is and the longer time until it is paid.
d. the lower r is and the longer time until it is paid.
c
You might also like to view...
The prisoners' dilemma is a tool of social analysis, and it shows why
A) individuals sometimes behave in ways inconsistent with their own best interest. B) judges sometimes hand down sentences heavier or lighter than the law recommends. C) people who break the law and are caught are behaving irrationally. D) people who break the law and are caught are behaving rationally. E) societies sometimes produce situations no member of the society wants.
Refer to Figure 4-13 which shows the market for watermelons. Suppose the government imposes a price floor of Pw. How will the price floor affect the quantity supplied, quantity demanded, and quantity exchanged?
What will be an ideal response?
Franco's Frozen Ice produces Italian flavored ice that is sold in the freezer section of grocery stores. Currently, Franco's does not have a fixed advertising budget and advertises in grocery stores' weekly advertising flyers and on the radio. A unit of advertising in the weekly flyers costs $2,000 and a unit of advertising on the radio costs $6,000. At their current advertising levels, the
marginal benefit of advertising in the flyer is $1,500 and the marginal benefit of advertising on the radio is $5,000. Which of the following is true? A) Franco's is currently maximizing its profits from advertising. B) To maximize profits, Franco's should increase the amount of advertising in flyers and on the radio. C) To maximize profits, Franco's should decrease the amount of advertising in flyers and on the radio. D) To maximize profits, Franco's should increase the amount of advertising in flyers, but not change the amount of advertising on the radio.
For direct price discrimination to work, the firm
a. Must be able to identify members of the low value group b. Charge the low-value group lower prices than the rest c. Prevent the low-value group from reselling their low priced goods to higher-valued group d. All of the above